Creating Sustainable Franchise Value in Mental Healthcare

The Problem

In the healthcare sector, many businesses – including several high-profile companies – have failed. Each generally has one thing in common: profits over patient care. A singular focus on growth and profit will not drive outcomes and therefore does not create sustainable franchise value. This is particularly true in behavioral health where in the face of explosive demand, suboptimal models have proliferated with limited success. Specifically, here are several flaws in these business models:

1. Prioritizing Human Capital:

• Lack of Quality Control and Churn: If you hire a therapist, psychiatrist, or other type of clinician (“Talent”) as an independent contractor who isn’t on your balance sheet (think of an Uber model) thus saving on working capital, even growing at a fast rate, you might think you have a less capital-intensive, higher-margin, and faster growth business. However, without building a team and incentivizing the Talent (which includes exclusivity), Talent can and often will jump from platform to platform (think Uber vs. Lyft). As a result, you have providers working at multiple companies, which commoditizes the service and is dilutive to brand value. This ultimately leads to Talent churn which results in patient turnover.
  
  
• Commodification of Talent: Simply aggregating under-utilized mental health providers that work in increasingly narrow treatment platforms has contributed to the highly publicized breakdown of early entrants. These are not sustainable businesses. Simply hiring clinicians generally is also not answer. The inherent value in these models is to fill time slots for underutilized clinicians in their private practices – “overflow”. This results in the business attracting moonlighters looking to solve the administrative and operational burdens and to maximize personal income. This does not even begin to address effective patient care at scale.

2. Treatment:

• We’ve seen platforms that do not offer comprehensive care – instead focusing on very specific treatment programs and services (i.e., therapy only or medication management without controlled substances). Patients are increasingly looking for comprehensive care – a “one-shop-stop”. They are seeking to address their underlying needs (e.g., talk therapy combined with medication which often requires more than a singular mental health treatment modality). This results in the need to source multiple clinicians. As we have all personally experienced, each clinician has different intake protocols, electronic health records, insurance coverage (if at all) among other issues. Navigating this administrative burden leads to frustration and wasted time – certainly not optimal in the mental health field.

There is a better way to simultaneously deliver high-quality care and create value.

The Solution

The solution is a business model centered around a team of full-time, salaried staff clinicians who spend more time on patient care, receive regular training, and who grow under expert supervision. The results are tangible – patients benefit and as a result, become repeat clients until such time that they have completed treatment.

Your brand will become synonymous with quality care. This is proven over time with measurable data as outcomes are collected. Importantly, this model creates economic value while also – most importantly – delivering results for patients. If you deliver clinical outcomes and create a strong therapeutic effect – you add additional capital-light revenue via a digital model – you have created something of long-term value that you can nurture and grow.

This is franchise value, and this is what we’re building every day at Rappore.

Rappore is taking the world’s best clinical mental health services virtual, capitalizing on the global megatrends of increasing mental health awareness and digitization. The virtual platform is a one-stop-shop (therapy + medication to include controlled substances only as needed) for patients who want high-quality, affordable, and accessible mental healthcare driving higher retention & lifetime value. Our staff model (primarily salaried clinicians) versus competitors (independent contractors / network models) leads to higher quality care, better retention, and improved profitability over time.

Between these competing models, Rappore’s comprehensive model will outperform with its higher franchise value and self-perpetuating, long-term returns. Satisfied clients drive higher retention and lower churn. Mental health is not a one-time interaction – it’s repetitive – weekly, monthly, annually. It’s akin to exercise or other forms of essential self-care. Creating, building, and fostering trusting relationships between providers and clients creates an inelastic business model and de-commoditizes mental health services.

This is the Rappore model and why we are creating the best-in-class standard for innovative mental health.